Watches of Switzerland Sees Strong 2Q Sales

RAPAPORT... Group revenue at Watches of Switzerland was stronger than expected during the second fiscal quarter as luxury products continue to perform well in both the US and UK markets.Sales rose 20% year on year to GBP 202.7 million ($262.6 million) for the first 10 weeks of the 13-week period ending October 25, the company said Tuesday. Revenue in the UK increased 13% to GBP 145.1 million ($188 million), with improving domestic sales ofsetting lower tourist and airport traffic, CEO Brian Duffy said. Intake from e-commerce in the region rose 50%. US sales grew 43% to GBP 57.7 million ($74.8 million) driven by growth across all regions, Duffy added.Luxury watches have "outperformed" expectations, while luxury-jewelry purchases performed well in both the US and UK. New product launches have also been stronger than anticipated, adding to the improvement, the company noted.Watches of Switzerland has revised its forecast for the full fiscal year based on the results. It now expects revenue of GBP 880 million to GBP 910 million ($ 1.14 billion to $1.18 billion), compared with its previous guidance of GBP 840 million to GBP 860 million ($1.09 billion to $1.11 billion)."Our guidance for the balance of the fiscal year assumes that the positive trend experienced in [the second quarter] will be moderated by the impact of pandemic-related retail disruption in the UK and the US and uncertainty in the US economy, impacting mainly in [the third quarter], Duffy said." "We do not assume any improvement in recent trends regarding the travel or tourist sectors."In addition to its Watches of Switzerland brand, which operates in the US and UK, the company also owns UK-based Goldsmiths and Mappin & Webb, along with Mayors, which it purchased from Birks Group in 2017. The company will report its complete second-quarter and half-year results on December 17.Image: A Watches of Switzerland store in Soho, New York. (Watches of Switzerland)